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Dominique Strauss-Kahn, IMF (International Monetary Fund) Managing Director, said at the World Economic Forum, in Davos, Switzerland, this week-end that too many of the world’s leading economies are fooling themselves in believing foreign export demand will drive their recoveries from the global recession.

Real US gross domestic product (GDP) increased at 5.7 percent annual rate in the fourth quarter of 2009 after increasing 2.2 percent in the third quarter, according to estimates released today by the Bureau of Economic Analysis.

Irish Economy: The Central Bank said today in its first Quarterly Bulletin of the year, that the economy appears to be close to the trough of the downturn in output terms, although some weakness will persist into the first half of this year, and there are likely to be further employment losses. Recovery, when it emerges, is likely to be gradual and modest. The Bank said although data for the final quarter of 2009 is not yet available, aggregate income in the economy is estimated to have declined by around 11 per cent last year in GNP terms, following a decline of just under 3 per cent in 2008. Carryover effects, and the likelihood that weakness in economic activity may continue into the first half of this year suggests that a further annual average contraction of around 2 per cent in GNP (gross national product – – this metric adjusts for the profits of the dominant multinational sector) and 1 per cent in GDP (gross domestic product) is in prospect for 2010 as a whole.

The Eurozone (EA16) seasonally-adjusted unemployment rate was 10.0% in December 2009, compared with 9.9% in November. It was 8.2% in December 2008. The EU27 unemployment rate was 9.6% in December 2009, compared with 9.5% in November. It was 7.6% in December 2008. For the Eurozone this is the highest rate since August 1998 and for the EU27 since the start of the series in January 2000. Ireland’s rate was at 13.3%; Netheralnds at 4.0% and Spain was at 19.5%.

Eurozone annual inflation is expected to be 1.0% in January 2010 according to a flash estimate issued by Eurostat, the statistical office of the European Union. Separately, reports from the European Central Bank (ECB) showed that bank lending will remain tight in Q1 2010 and M3 money supply growth remained negative in December.

Microsoft reported on Thursday that consumer demand for Windows 7 helped give it a 60% increase in profit during the last quarter. Another Seattle-based tech giant, Amazon, posted a blowout quarter, growing its share of US retail in the holiday quarter. Net income jumped 71%, driven by a 42% increase in sales that stretched across media and electronics. Microsoft’s revenues rose 14%.

Ireland is one of a small number of the 24 rich countries of the Paris-based Organisation for Economic Cooperation and Development (OECD) that has suffered the worst of the global recession but it is striking that beyond short-term measures to correct the public finance imbalances, there is no evidence of serious interest in fundamental reform among the political class nor is there public pressure for change. Given the largely avoidable economic calamity, and the overwhelming dependence on foreign firms to deliver long-term prosperity, with the exception of the new reforming leadership at the Central Bank, it’s mainly business as usual elsewhere. It’s a valid question to ask, if an unreformed Ireland is destined to be another failed rich State like Japan?